Cash crops reduce the welfare of farm households in Senegal

The production of cash crops is often seen as an effective way to fight poverty in developing countries. Using data from the Senegal poverty monitoring Survey II (ESPS II), this study assessed the impact of the production of cash crops on the welfare of farm households in Senegal. Since it is likely that cash cropping by a household was affected by the same unobserved factors that affect household welfare (defined as the nominal consumption expenditure per adult equivalent, converted into real terms by dividing it by the national poverty line), an instrumental variables approach that addressed the endogeneity of cash cropping was employed. An unconditional quantiles regression was also conducted to assess the impact of cash cropping on the distribution of farm households’ welfare. It appears that the production of cash crops (including groundnut, tomato, melons, banana, sesame, oil palm, apple cashew, cotton, citrus and jatropha), negatively impacts the welfare of farm households in Senegal, with a more pronounced effect on households with higher levels of welfare. Accordingly, the role assigned to the agricultural sector for poverty reduction in Senegal cannot mainly result from the production of cash crops at this stage of national development. Agricultural policies in Senegal must focus more on promoting food crops and on facilitating access to production assets within a political and economic framework that supports an efficient functioning of markets.